Claim Based On Failure To Discover Phony Screen Shot Dismissed on Statute of Limitations Grounds

Novack and Macey LLP

Novack and Macey LLP

Plaintiff alleged that he retained lawyers to conduct due diligence with respect to film investments he was contemplating.   The lawyers allegedly failed to discover that a screen shot of a bank statement provided to prove that others had invested in the film was “phony.”  Plaintiff alleged that this negligence caused him to invest funds that he lost.

The defendant lawyers moved to dismiss and the circuit court granted the motion on statute of limitations grounds. 

The appellate court affirmed dismissal.  The court held that the two year statute of limitations began to run when the plaintiff had enough knowledge to inquire whether it was injured and that the injuries were wrongfully caused.  The court held that there were at least four dates by which plaintiff had such knowledge: when the defendants sent plaintiff an email pointing out the phony screen shot, which necessarily told plaintiff that they had not previously discovered the phony screen shot; when defendants filed two lawsuits on plaintiff’s behalf that described the fraud; and when judgment was entered against the fraudster in one of those suits.  The court rejected plaintiff’s argument that equitable estoppel tolled the statute of limitations for several reasons.  First, the court held that a lawyer has no duty to advise a client that the lawyer may have committed malpractice; second, acts constituting alleged malpractice cannot be the same acts invoked to create equitable estoppel; third, regardless of defendants’ alleged conduct, the plaintiff had sufficient information to know that it had a malpractice claim.

Bill A. Busbice, Jr., an individual, Ollawood Productions, LLC, Ecibsub, LLC v. Troutman Sanders, LLP, Robert E. Browne, Jr., Michael D. Friedman and Paul Gale, 2021 IL App (1st) 200848-U

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